Brazilian Imported Ethanol Tax Questioned

NAFB News Service  • Posted: Wednesday, February 1, 2012

The Renewable Fuels Association is urging U.S. Trade Representative Ambassador Ron Kirk to investigate the news that the Brazilian state of Sao Paulo was imposing a 25 percent tax on all imported ethanol. Port Santos in Sao Paulo is the main port of entry for U.S. ethanol exports to Brazil, which accounted for an estimated 400-million gallons in 2011. RFA President and CEO Bob Dinneen says – because ethanol produced in Sao Paulo is tax exempt, ethanol imported into Sao Paulo from the United States and other areas is at a substantial economic disadvantage.

Dinneen says – this action is discriminatory and may severely—and immediately—restrict the exportation of U.S. ethanol to Brazil. He has always held that – decisions surrounding Brazil tariffs are neither permanent nor transparent and additional trade barriers could be constructed at any time. The actions of the state of Sao Paulo are such an example.

In his letter to the trade ambassador, Dinneen wrote – we believe the action taken by the state of Sao Paulo is in violation of the Generalized Agreement on Tariffs and Trade and possibly an article of the WTO Technical Barriers to Trade Agreement. According to Dinneen, – it is no doubt that this recent decision will result in the erection of another significant barrier to U.S. ethanol exports to Brazil.